Should I Take Money From My IRA to Buy a House?

Summary

Podcast Summary

Podcast: Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Episode: Should I Take Money From My IRA to Buy a House?
Date: September 4, 2025
Host: Suze Orman (with KT)

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Overview

This episode of Suze Orman’s Women & Money podcast revolves around listener questions with a special focus on one major topic: “Should I Take Money From My IRA to Buy a House?” Suze, alongside her partner KT, tackles a range of questions covering investments, retirement planning, annuities, required minimum distributions, and real estate risk. As always, Suze offers candid advice, blending decades of expertise with accessible explanations and memorable takeaways for listeners navigating personal finance decisions.

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Key Discussion Points & Insights

1. VTI vs. VOO: Investment Strategy

• Question: Listener asks why Suze no longer mentions VTI (Vanguard Total Stock Market ETF).
• Suze’s Response:
  • “I still love VTI ... But the reason I switched ... to VOO … those top 10 holdings only make up 4.33% of VTI, [but] 38% of VOO. Therefore, because I knew those top 10 holdings would be more aggressive and profitable in VOO than VTI, that is why I switched. However, VTI is still fabulous.” (03:25)
  • Insight: Suze still endorses VTI, but prefers VOO now for its heavier weighting in aggressive, profitable tech stocks.

2. Withdrawing from 401(k)/IRA: Whose Account Matters?

• Scenario: Couple wants to withdraw $4,500/month from combined $1.5M in retirement accounts; wife has a pension.
• Suze’s Response:
  • Focus on investments within accounts and required minimum distributions (RMDs).
  • “After RMDs, it really doesn’t matter that much. What matters is what the accounts are invested in … That’s where the money should come from.” (05:03)

3. Passing on a 529 Plan

• Question: Can a grandparent pass a 529 plan to their daughter?
• Suze’s Advice:
  • “You name your daughter … as a successor owner. That way she will take over management if you die.” (06:34)

4. Transferring Existing Wills into ‘Must Have Documents’ Package

• Dilemma: Listener wants to update existing will with Suze’s ‘must have’ estate planning documents.
• Suze’s Guidance:
  • Must start fresh; cannot import old documents.
  • “With the must have documents, you have to do all four at one time...It will populate all four at once: will, revocable trust, advance directive, and durable power of attorney.” (07:27)
  • Tip: Get them notarized, fund the trust, and ensure assets are properly retitled.

5. Dividend Management vs. Annuities in Retirement

• Question: Should dividends be reinvested most of the year and withdrawn once for living expenses, instead of buying an annuity?
• Suze’s View:
  • “Number one, I don’t want you to do an annuity. ... If you can live off the fourth quarter dividend, fine...” (11:15)
  • Caution: Dividends are not guaranteed; approach with care.

6. Main Segment: Should I Take Money from My IRA to Buy a House?

• Scenario:
  • Listener, 61, faces breakup, wants to buy home debt-free; would need to tap IRA.
  • Feels anxious and insecure.
• KT’s Immediate Advice:
  • “Four letter word, baby—rent. ... Don’t go and make your life stuck again. Just be free and rent for a couple years.” (15:09)
• Suze’s Deep Dive:
  • Cites her law: “After suffering a loss … do nothing for at least one to two years.”
  • “Now, you don’t want to take money out of a retirement account. That is just the stupidest thing you could ever do simply to what, buy another house? No way. Not on our watch.” (15:59)
  • Prioritize emotional recovery, clarify assets post-breakup, and avoid financial decisions in high-stress moments.
  • “If it makes you feel insecure, you are to do nothing.” (17:23)

7. How to Bulletproof Real Estate Income in a Tough Economy

• Listener’s Concern: Taxes, insurance, and interest rates up; wants to safeguard rental income.
• KT’s Advice:
  • “Don’t buy any more property right now at all.” (19:05)
• Suze’s Analysis:
  • Real estate inherently risky—impossible to bulletproof from many variables (taxes, repairs, vacancies, climate change).
  • “When it comes to real estate, it is very, very difficult to protect yourself … especially with the insurance market today.” (21:08)
  • Recommend diversification beyond property, e.g., dividend stocks, T-bills, and REITs.

8. When to Stop Roth Conversions in Retirement

• Question: Listener converting 401(k) to Roth; wonders when to stop.
• Suze’s Guidance:
  • Must take RMDs first before converting each year after age 73.
  • Keep converting if you don’t need the funds and want to leave tax-free inheritance.
  • “If in fact you know that you’re going to be needing that money to live on, then … just take out what you want … and not convert it to a Roth.” (22:53)

9. Income Annuities: Qualified vs. Non-Qualified Money

• Question: What type of funds are best for annuity purchases?
• Suze’s Quick Rule:
  • “Do it with non-qualified money, meaning money outside of a retirement account … because with qualified [retirement] money, it becomes very confusing as to RMDs and annuity balances.” (24:25)

10. Pro-Rata Rule and Roth Conversions

• Concern: Does pro-rata rule apply to a standard Roth conversion from an IRA?
• Suze’s Clarification:
  • Pro-rata rule only affects backdoor Roth contributions, not regular conversions.
  • “You are confusing conversion with a backdoor Roth … Pro-rata rule only relates to a backdoor Roth … You are simply converting from a pre-tax to a Roth.” (26:53)
  • For a deep dive, review her February 18, 2024, episode dedicated to this topic.

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Notable Quotes & Memorable Moments

• On Post-Breakup Financial Decisions:
  • “After you have suffered the loss of a loved one, you are to do absolutely nothing other than keep your money safe and sound for at least one to two years.” — Suze Orman (15:59)
• On Using IRAs to Buy a House:
  • “Now, you don’t want to take money out of a retirement account. That is just the stupidest thing you could ever do simply to what, buy another house? No way.” — Suze Orman (15:59)
• On Investment Preferences:
  • “I still love VTI … [but] I knew those top 10 holdings would be more aggressive and profitable in VOO than VTI, that is why I switched.” — Suze Orman (03:25)
• On Real Estate Risk:
  • “It is very, very difficult to protect yourself, especially with the insurance market today. You best think about it.” — Suze Orman (21:08)
• On Estate Documents:
  • “The less money you have, the more you need those documents.” — Suze Orman (08:57)
• On Money and Security:
  • “If it makes you feel insecure, you are to do nothing.” — Suze Orman (17:23)

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Timestamps for Key Segments

• [03:25] — Why Suze now prefers VOO over VTI
• [05:03] — Withdrawing from 401(k)/IRA: Whose account matters?
• [06:34] — Passing on a 529 plan via successor owner
• [07:27] — ‘Must have documents’ and updating your estate plan
• [11:15] — Reinvesting dividends vs. buying an annuity in retirement
• [15:09-18:03] — Should you take IRA money to buy a home after a breakup?
• [19:05-21:24] — Can you bulletproof real estate investments?
• [22:53] — When to stop converting to a Roth IRA
• [24:25] — Should income annuities use qualified or non-qualified money?
• [26:53] — The pro-rata rule and Roth conversions

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Tone & Final Advice

Suze blends tough love with humor and warmth (“Pop quizzy! Ding ding ding!”), always putting security and caution first, especially during stressful life changes. She consistently centers her advice on emotional wellbeing, prudent analysis, and keeping financial decisions rooted in stability—not in fear or haste.

Signature Closing:

• “People first, then money, then things.” — [29:09]

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This episode is highly practical for anyone facing big financial decisions amidst life transitions, and offers tactical guidance along with plenty of Suze's signature encouragement to pause, reflect, and act wisely.

Transcript

[Susie Orman]

Hi, everybody. Suzio here. Now, what is the goal of money? The goal of money is for you to be secure. And there is no better way for you to be secure than having an emergency savings account. It is essential for your financial foundation. So all of you should be participating in the Ultimate Opportunity savings account at Alliant Credit Union. Go to myalliant.com to find out more. And be secure. September 4, 2025. Welcome, everybody, to the Women in Money podcast.

[KT]

And everyone's smart enough to listen.

[Susie Orman]

Oh, you did it, kt. For some reason, whenever we do an open KT forgets to say. And everybody's smart enough to listen. And Today is what? KT.

[KT]

So September 4th.

[Susie Orman]

No, today is what?

[KT]

Ask KT and Susie anything.

[Susie Orman]

Ding, ding, ding, ding, ding. You got that right. All right.

[KT]

Do you believe it's September?

[Susie Orman]

I do believe it's September. And this is obviously a special day.

[KT]

Yeah, this is a special day. This was a day of having a great honor and privilege 13 years ago. Tell them why.

[Susie Orman]

Yeah. Because my mama passed today, 13 years.

[KT]

Ago, when she was took her journey, baby.

[Susie Orman]

Yeah. She was 97 years of age. And KT and myself and KT's twin sister, Lynn, and her husband Tom, we were there.

[KT]

We bid her farewell in the most beautiful way. And it was such an honor for any of you listening, if you have the opportunity to be with a loved one when they're taking their final journey, do it. Don't be afraid, don't be sad. Just do it. It's such an honor.

[Susie Orman]

It is. Turns out my mother was afraid, my brother was afraid, and he lives with that sorrow to this day. Anyway, all right, so you have a question?

[KT]

I do. Let's start with Cindy. I like Cindy because she's Cindy the Dog Walker. She said. Hi, Susie and kt, quick question. I'm a longtime listener and reader of your books. Many years ago, yay for me, I purchased VTI on your recommendation. I still own it, and I'm curious why you never mention that ETF anymore. So tell her why you don't mention it. Or do you.

[Susie Orman]

Have you noticed that I stopped mentioning it?

[KT]

No, of course not.

[Susie Orman]

All right, so anyway, here's the truth, Cindy. I still love vti. The Vanguard Total Stock Market Index etf. Just that simple. But the reason I switched, and I really switched to VOO V O O, which is also Vanguard, which has a little smaller expense ratio than the spiders, is that VTI versus Voo. They have the same exact top 10 holdings, which happen to be Nvidia, Microsoft, Apple, Amazon, Meta, Broadcom, Alphabet, I love Google. There, Tesla and Berkshire. However, those top 10 holdings only make up 4.33percent of VTI, 38% of VOO. Therefore, because I knew that those top 10 holdings would be more aggressive and profitable in VOO than VTI, that is why I switched. However, VTI is still fabulous. No problem. Okay, go on, kt.

[KT]

Okay, this next question is an interesting one because I like to know the answer as well.

[Susie Orman]

She makes me laugh. Everybody.

[KT]

Hi, Susie and kt.

[Susie Orman]

Wait, wait. I just have to tell you, every once in a while, she's reading these and she looks at me and she says, I don't know the answer to this one. And I go, kt, of course you don't. That's why it's ask KT and Susie anything. You ask kt. Susie answers. All right, go on.

[KT]

Okay, so this question is a good one. It said, Hi, Susie and KT. My spouse and I are ready to withdraw for $4,500 a month from our combined $1.5 million in 401ks and IRAs. She is 77. I am 65. Most of our retirement savings is under my name. Because she is a retired educator with a pension, does it matter in the long run whose account we withdraw from?

[Susie Orman]

Hmm? Why are you looking at me like that?

[KT]

Well, does it? Yeah, it does.

[Susie Orman]

All right, everybody. Listen, Peggy, it's not necessarily which account does it matter that you withdraw from as much as what are you invested in within those accounts. Now, obviously, at 77, she's taking her RMDs. So you have to take into consideration required minimum distrib. How much does she have to take out every single year from her account? And then you can decide after that amount which account has the best investments for you to withdraw from. So, for instance, if you're invested in good quality stocks like maybe some of the ones I just mentioned, and you're going for growth and you like them and you feel secure with them when why sell them now just to withdraw the money? So again, after the RMDs, it really doesn't matter that much. What matters is what the accounts are invested in, and therefore, that's where the money should come from. All right.

[KT]

Okay, next question is from Deanna. Hi, Susie. I'm from Utah. My husband and I have a 529 plan for our two grandchildren. One what happens when we die? Where does this money go? Can I pass the 529 plan on to my daughter, who is the mother of the two grandchildren?

[Susie Orman]

Yeah, you can Right. But what you do is you name your daughter or the mother of the grandchildren or whatever, as a successor owner. That way she will take over management if you die. Just that simple.

[KT]

All right, kt, okay, next question from Audrey. She said, hi, Susie and Katie. My husband and I are a blended family. We took care of our wills a few years ago. But as time goes on and I listen more and more to your podcast, there are some things I would like to change in our documents.

[Susie Orman]

Just like me.

[KT]

Just like us. You're not alone, Audrey. She said, I did purchase the must have documents, but I don't know how to translate and transfer what I currently have in my will into those documents. So let's explain to her how that works.

[Susie Orman]

So what you have to do, Audrey, is that given that you created a will, possibly a trust, whatever it may be, outside of the must have documents to begin with, you cannot physically transfer them into the must have documents where they automatically transfer over. You have to, with the. The must have documents, create new documents. And you probably should do that anyway just to make sure that what you wanted back then is what you want now. Because obviously you say you want to make some changes, so you would just start over. Because one thing interesting with the must have documents is that you have to do all four must have documents at one time. So when you go on, you'll see you answer all these questions and really not that many, and it will populate all four at once. The will, the living, revocable trust, the advance directive and durable power of attorney for health care, as well as the financial power of attorney. It will do all of those at once for you. So you might as well just do that. And there you go. And those will be your new documents. Make sure you get them notarized and that you fund the trust, which means you transfer the name of your real estate or whatever into the name of the trust.

[KT]

All right, kt, so Susie, tell everyone where to go to get the must have docs.

[Susie Orman]

Yeah. Everybody listen to me. If you don't have the documents that I just talked about, I'm telling you, you are without a shadow of a doubt making the absolute biggest mistake in your life. And believe it or not, the less money you have, the more you need those documents. And I'm now strictly the educator of those documents. So what you would do is you would go to musthavedocs.com and currently they are $99. And what's great about that is it's $2,500 worth, state of the art Documents that you can share with any family member. It's not a big deal because the object of them isn't that every single one of you needs to buy one. It's that only one of you needs to step forward and make sure that not only have you protected yourself, but you've protected all of your family members and maybe all of your friends if you want to as well. All right.

[KT]

Okay. My next question is from Este. Hi, Susie and kt. I watch your TV show Susie back in the day.

[Susie Orman]

You know what? Wait, wait, wait, wait. You can watch it again because they are premiering little by Little on YouTube. So go to YouTube.com Susie Orman. That is my personal and official YouTube channel. And people are loving watching those shows all over again. All right, go on.

[KT]

Okay. She said, I watched the TV show back in the day, have been faithfully listening to you and kt. I, I take notes. I read the Ultimate Retirement Guide twice. Then she said, I may have missed this, but how do you feel about reinvesting dividends 3/4 of the year and taking the cash in the fourth quarter for annual living expenses and taxes instead of buying an annuity? So that's what Este's question is.

[Susie Orman]

Let me see this email.

[KT]

And Este, just so we all know, is about 68 years old. So that's why I'm wondering, an annuity.

[Susie Orman]

Here's the thing. Number one, I don't want you to do an annuity. That's number one. But number two, if you reinvest the dividends, that means you are reinvesting into the shares of the stock that you already own. And then you take the cash in the fourth quarter, you can do that as long as that dividend in the fourth quarter is enough for your annual living expenses. Does that make sense? So if you're going to do it that way, and you know that you are invested in a stock that's dividend has been increasing over the past 10 years, I don't have a problem with that because remember, dividends are not guaranteed. If the company gets in trouble, they could absolutely be cut their dividend and you don't want to be in that situation. But if you can live off of the fourth quarter dividend, fine, you can take that in cash. But it becomes very complicated because then you have to change from reinvesting to da da, da. So just think about it. But I would not be doing an annuity no matter what. All right.

[KT]

Good morning, Susie and kt.

[Susie Orman]

It is, is it not, Katie?

[KT]

Yes. My current relationship is not working out.

[Susie Orman]

What else is new?

[KT]

All right, Susan, you know how many.

[Susie Orman]

Emails we get that start with that.

[KT]

Exact same relationship is not working. You're not alone. You're not alone. There's a whole lot we get like this, Susan. But at least, Susie, you and I are working out just right. So Susan says, we bought a house together. I own 25% of the house. The house is worth about $520,000.

[Susie Orman]

All right, so then she makes about $130,000 dollars worth of that house.

[KT]

My plan is to move out and buy another house. I will have the equity from the house, which he will either pay to me or the house will be sold and I'll get it that way. Susan has $25,000 in an emergency fund with no debt. About 345,000 in a 401k Roth and traditional IRA accounts. She earns about 110,000 a year and does not plan on retiring. I really do not want a mortgage at this stage in my life. I'm 61, but will have to take money out of my retirement in order to buy my home mortgage free. So she said she can also buy it and take a mortgage out means she no longer contributes to her retirement and she wouldn't be debt free. Can you help me? This is the real clincher, everybody. Susan said I feel very anxious and not secure at all.

[Susie Orman]

Ding, ding, ding. Pop quizzy.

[KT]

Yeah, I'll tell you what I would.

[Susie Orman]

Do, Pop quizzy, everybody, before KT answers. Because KT people have been writing and saying, please bring back the quizzy.

[KT]

Oh, oh, no way.

[Susie Orman]

Well, pop.

[KT]

Okay, here's the pop.

[Susie Orman]

Wait. Before you answer everybody, how would you seriously answer this question? She's 61 years of age. She only has $25,000 in an emergency fund, no other debt. She has about 345,000 again in her retirement accounts. Think about that. She really doesn't want a mortgage. So she would, at the age again of 61, have to take money out of her retirement accounts to in order order to buy the home mortgage free. She feels anxious. She could take a mortgage, but she doesn't want to. KT, how would you answer that?

[KT]

Four letter word baby rent. She's 61 years old. She's just leaving a relationship. It's emotional. They broke up. Don't go and make your life stuck again. Just be free and rent for a couple years. You can afford to rent with that kind of a salary? Yeah, $110 and still be free and rent. Simple. One of the things that I often ask when we read these and when I read the puzzle needs to be put together with all the pieces. And you often send us a question, but you don't tell us where you live, for instance. That would have a great deal of bearing on, you know, whether you buy rent, so on and so forth.

[Susie Orman]

So ding, ding, ding, ding, ding.

[KT]

Yeah, rent, right.

[Susie Orman]

But for many different reasons. Okay, all right, so first of all, what is my main law of money? When it comes to you? After you have suffered the loss of a loved one, you are to do absolutely nothing other than keep your money safe and sound for at least one to two years. Because you're saying to me that your relationship is not working out. Don't tell me that that doesn't have an emotional impact on you. Whether you like him or her, you dislike them or whatever, it has an emotional impact. Now, you don't want to take money out of a retirement account. That is just the stupidest thing you could ever do. Simply to what, Buy another house? No way. Not on our watch. You really shouldn't decide anything until you know how much money you are going to have. What is he going to actually be giving you if he buys you out? And if you sell it, remember, there will be real estate commissions, all kinds of things. This is no longer a seller's market. Prices are going down and down. Therefore, just wait to see how much you really get. When that is complete, one step at a time. Next, how do you know what to do if you're about to do something and it makes you feel insecure? Right now you feel very anxious and not secure at all. Therefore you are to do nothing. So before you do anything, check that little stomach of yours. And if it is nervous, that is yourself telling yourself, don't do it. Remember, once you do something, it's already done. If you haven't done it yet, you have a lot of time to do it. All right, there you go.

[KT]

I was right.

[Susie Orman]

I gave you a ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding.

[KT]

Okay, next question is from Melissa. She said, Susie, I'm a single mom with a 16 year old son. I'm also a landlord with just a few properties.

[Susie Orman]

Oh, just a few properties.

[KT]

The question is, how do I protect my real estate from the type of economy that we are currently in? How do I bulletproof myself from losing money? When you find that answer, share it with all of us. And then she said, taxes are up, insurance is up, up at the same time, so are the interest rates. I'm waiting for interest rates to go down. So I can invest in another property outside of New York. These properties, which are passive income, are my main source of income. Listen, here's the thing. Make it a quizzy again.

[Susie Orman]

All right? Ding, ding, ding.

[KT]

Go for it. Don't buy any more property right now at all.

[Susie Orman]

That's your advice?

[KT]

Yeah.

[Susie Orman]

All right. That's her advice. Whether it's right or wrong, I can't tell you. However, let me just say something. I talk about investing, obviously, all the time, and I talk about diversification. What concerns me is your main source of passive income happens to be properties. And you're already asking, how do you bulletproof yourself from losing money? When it comes to real estate, it's very, very difficult to bulletproof yourself from losing money. Why? You cannot protect yourself against insurance going up. You cannot protect yourself against property taxes going up. You cannot protect yourself against the house needing repairs. You cannot protect yourself against renting to somebody who all of a sudd their job and they stop paying you and they won't leave. And now you may have mortgage payments with no income. You cannot adequately truthfully protect yourself against climate change and what mother nature may bring upon you. So there are all of these you can't do anything about. But what you can do is maybe think about, oh, do I have anything invested in dividend paying stocks? Do I have at least an eight month emergency fund maybe generating some income to me, Do I have any treasury bill bonds or notes that are pretty much guaranteed? What else do you have? But you're waiting for interest rates to go down so you could invest in another property. So the truth of the matter is, I don't know. I'd like to hear that you were investing in something other than property, even if you did an REIT within a retirement account. But I don't know enough about you, but I can tell you this. When it comes to real estate, it is very, very difficult to protect yourself, especially with the insurance market today. You best think about it.

[KT]

No bulletproof, right? Okay, Susie, next question's from Mark. I really like this question. He said, Susie, I'm 70 years old and I have 1.5 million in a rolled over 401k. I've been converting it into a Roth for the past three years. And I'm wondering, when is it a good time to stop converting and just pay the grim reaper? So Mark's question is, how will the RMDs and converting mix in the next few years?

[Susie Orman]

Yeah, so what?

[KT]

I would love to hear that too.

[Susie Orman]

Why?

[KT]

Just curious, because that's a great question. No one ever asked that question.

[Susie Orman]

All right, so Mark, here's what you first need to know. And everybody who is on RMDs or who will eventually be on RMDs is. And you want to convert from a traditional, which is a pre tax retirement account to a Roth, which is after tax.

[KT]

Tell them what an RMD is required, minimum distribution and it starts at what age?

[Susie Orman]

73 currently.

[KT]

Okay.

[Susie Orman]

And then very short, you will be 75. Just so you know. However, here's what you have to understand. You cannot convert in the year that you have to take RMDs until you have taken your RMDs and, and after you have taken your RMDs, then you can convert. So that's how that will work for you. How do you know if you should just stop converting and just paying the Grim Reaper? KT's laughing because she knows how hard that was for me to say anyway, but here's how you know you would only convert if in fact you don't need the money that you are converting. You want to leave it in there for growth, you don't need to touch it for years. If ever you want to leave it to your beneficiaries and you want to leave it to them absolutely tax free, then you would continue to convert. If in fact you know that you're going to be needing that money to live on, then you would maybe just take out what you want from, from your traditional ira. And what would you do? Live on it and not convert it to a Roth. Just that simple. Because remember, there are still some rules in everything with a Roth and a Roth conversion, even at your age, believe it or not. So therefore that's how you would know. So Mark, it's just that simple. All right, kt.

[KT]

Okay, Susie, next question is from Kelly and Kelly asks, does it make more sense to purchase an income annuity with qualified or non qualified money to shore up guaranteed income needs to supplement my pension and Social Security.

[Susie Orman]

So that's simple. If you are going to buy an income annuity, all right, however, do it with non qualified money, meaning money outside of a retirement account. Because remember in a retirement account, a pre taxed retirement account, all right, which is qualified money, you are eventually going to have to pay RMDs and then it becomes very confusing as to with an income annuity, what was the value of the balance of that income annuity at the end of the year prior to the year you're taking RMDs? Very confusing. So do it with non qualified Money. Last question, KT, this is from Amy.

[KT]

And Amy is 55.

[Susie Orman]

Yeah. What were we doing at 60 days? Remember what we were doing at 55?

[KT]

Yeah. That was a great year.

[Susie Orman]

They were all great years.

[KT]

So much fun. She said, I have an old 401 balance of $69,000 that I just rolled over into a Schwab traditional IRA.

[Susie Orman]

All right.

[KT]

My plan was to convert little by little into my Roth ir. But when I was looking back at my Susie notebook, I noticed something about the pro rata rule. My notes were incomplete. So now I'm wondering if I can still convert to my Roth ira. I do have another traditional ira, and I know that's what the pro rata rule refers to. Please help me.

[Susie Orman]

So pop pop quizzy. Pop quizzy. Can she or can she not kt. Oh, will she be subjected to the pro rata rule because she has. Because she's shaking her head up or down?

[KT]

I'm asking. Susie, help me. Can she or can she not? Right. Wait, so go ahead, keep going.

[Susie Orman]

So can she convert to a Roth? Given the fact that she has a traditional ira, is she going to be subjected to the pro rata rule?

[KT]

I think you are. Oh, you're not? All right, wait, but can I just say something? Susie, on February 18, 2024, you did an entire podcast about the pro rata.

[Susie Orman]

Rule and Roth IRAs.

[KT]

Yes. So? So Amy, go back and listen to it. And that's for everyone listening. February 18, 2024.

[Susie Orman]

All right, so, but here's the scoop, Amy. You are confusing conversion with a backdoor Roth. The pro rata rule only relates to a backdoor Roth period, which means you have too much income to get new money into a Roth ira. So what do you do? You put money into a traditional ira, you make it non deductible and then. And then you convert it to a Roth. But you can only do that if you don't have any pre tax retirement account outside of your employers. You are simply converting from a pre tax to a Roth, which means you are going to pay taxes on that money and the five year clock will start the day you convert every time you convert. So no, it does not apply to you at all. But kt, I'm so proud of you. You went back and looked up that podcast.

[KT]

I did. But I didn't. I should have listened to it and I wouldn't have gotten anyway.

[Susie Orman]

All right, there you go. So until Sunday when I'm going to do a different kind as Susie school.

[KT]

Tell them what you're doing.

[Susie Orman]

So I was looking through some of the emails and Dr. E. So if you're listening, know this podcast is going to be about you asked a question and I realized rather than letting K ask it on Ask KT and Susie anything, I'm going to turn this one into a Susie School and really teach you, along with Dr. E, what you need to know about. You're going to have to tune in and find out. So we are in September, and because we are now in September, I promised one of the listeners who wrote in that said, Susie, please go back to closing the podcast with your traditional way of doing it. And I said for you, for the rest of the year, we will do that. So there's really only one thing we want you to remember when it comes to your money and it is this.

[KT]

People first, then money, then things.

[Susie Orman]

Now you stay safe and secure. See you Sunday. Bye Bye.

[Podcast Outro Singer]

We are strong we are wise we will not apologize we are here we will thrive Together we will rise we're the little bit of faith and everything it takes we are strong we are wise Together we will rise.

[Susie Orman]

Hi everybody, Suzy O Here now. If you are looking for a way to start saving to get the most out of your money, I want you to go to myalliant.com that's M y a l l I a n t dot com and look into opening an Ultimate Opportunity Savings Account. Put in at least $100 a month every single month for 12 consecutive months. Earn 3.10% interest on your money right now and get $100 at the end. Are you kidding me? It's the best, best deal out there. Start saving right now.

[Podcast Disclaimer Reader]

Neither Suze Orman Media nor Susie Orman is acting as a Certified Financial Planner Advisor, a Certified Financial Analyst, an economist, CPA accountant or lawyer. Neither Suze Orman Media nor Suze Orman make any recommendations as to any specific securities or investments. All content contained in this podcast is for informational and general purposes only and does not constitute financial accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any losses which may arise from accessing or reliance on information in this podcast and to the fullest extent permitted by law. We exclude all liability for loss damages, direct or indirect, arising from the use of this information. The must have documents discussed in this podcast are legal documents created by a lawyer and distributed by Hay House.